Motorists in tax headlights

Australia's peak car-industry group has slammed both the Greens and the federal government for targeting motorists in a bid to cut emissions and raise taxes.

13 May 2011Stephen Ottley

The federal budget includes cuts to the fringe benefits tax (FBT) for company vehicles.

Australia's peak car-industry group has slammed both the Greens and the federal government for targeting motorists in a bid to cut emissions and raise taxes.

This week's federal budget includes cuts to the fringe benefits tax (FBT) for company vehicles. However, the chief executive of the Federal Chamber of Automotive Industries, Andrew McKellar, says the fact that Treasury's costing for the FBT changes were released via the website of Greens leader Senator Bob Brown and not by the government itself is a grave worry for motorists.

''It raises the concern that this element has been driven by the Greens ? not by the government,'' McKellar says.

The changes are the latest in a series of government cutbacks that hurt the car industry, which have included the axing of both the Green Car Innovation Fund and the proposed cash-for-clunkers scheme earlier this year.

McKellar says the industry's relationship with the government remains largely positive but the lack of consultation on the recent cuts has been most disappointing.

The new FBT scheme will implement a flat rate for its method of calculating a car's fringe benefit, regardless of the kilometres covered. It will replace the old model that uses a sliding scale based on the distance driven, with higher rates of travel attracting a lower tax rate.